CHARLOTTE, N.C. – Gas prices in the Carolinas have increased significantly on the week, as the Colonial Pipeline outage threatens pump prices and possibly supply.
AAA forecasts gas prices to climb even more this week in reaction to the shutdown of the pipeline, which delivers approximately 45% of all fuel to the East Coast.
“The impact of this pipeline outage will vary regionally,” said Tiffany Wright, spokesperson, AAA-The Auto Club Group in the Carolinas. “The outage will have implications on both gasoline supply and prices. The longer it is offline, the larger the impact on the East Coast.”
On the week, North Carolina’s gas price average increased by 6 cents, currently sitting at $2.73. This is 10 cents more expensive than last month and $1.06 more expensive than a year ago.
South Carolina’s gas price average increased by 7 cents on the week, currently sitting at $2.67. This is 9 cents more expensive than last month and $1.10 more expensive than a year ago.
Despite these increases, both states are still in the top 10 for least expensive gas.
The national gas price average jumped 6 cents on the week, to $2.96; And if the trend continues, an increase of 3 more cents would make the national average the most expensive since November 2014, the last time we saw average prices at $2.99 or higher.
Over the weekend, the Colonial Pipeline announced it was the victim of a cybersecurity attack and, as a precaution, shut down the pipeline, which runs from Texas to New York Harbor. At this time, some lateral lines have reopened, but there is no word on when the mainline, including the gasoline line, will be operational.
While there is sufficient gasoline supply in the U.S. (235.8 million bbl), other pipelines and the Department of Transportation’s temporary hours-of-service exemption for tanker trucks transporting gasoline and other fuels will be able to ease the strain but not resolve the issues caused by the pipeline interruption. Once the pipeline is up and running, there could still be residual delays as it takes about 15-18 days for fuel to flow from Texas to New York.
Market optimism that crude demand will recover, despite an uptick in coronavirus infection rates, helped to lift prices last week. Prices could continue to climb this week if the market remains optimistic as vaccines continue to roll out.
Additionally, prices increased after the Energy Information Administration’s latest weekly report revealed that total domestic crude oil inventory dropped by 8 million bbl to 485.1 million bbl. If EIA’s next report shows another decrease in total domestic crude supply, crude prices could climb further this week.